Fourteen years ago, Virgin Galactic and New Mexico promised “tens of thousands” of tourists would fly to space from Spaceport America by 2019. Total thus far: 0.
by Douglas Messier Managing Editor
When they announced in December 2005 that Virgin Galactic would locate its space tourism business in New Mexico, Virgin Founder Richard Branson and Gov. Bill Richardson made a number of eye-popping claims about why taxpayers should back a plan to build the Southwest Regional Spaceport to serve as the space tourism company’s home base:
$331 million in total construction revenues in 2007;
2,460 construction-related jobs;
$1 billion in total spending, payroll of $300 million and 2,300 jobs by the fifth year of operation; and,
$750 million in total revenues and more than 3,500 jobs by 2020.
Virgin Galactic would sign a 20-year lease as anchor tenant and pay fees based on the number of launches it conducted. New Mexico would use the spaceport, Virgin’s presence and the funds generated to develop a large aerospace cluster.
Surprisingly, New Mexico would spend more money, $225 million, to develop a facility now known as Spaceport America than the $108 million that Branson planned to spend on developing a fleet of five SpaceShipTwos and WhiteKnightTwo carrier aircraft.
Among all the big numbers in the announcement, there was a truly astounding one that was deemed so important it was mentioned twice. (Emphasis added)
Bill Richardson, who pushed through the construction of the world’s first purpose-built commercial spaceport as governor of New Mexico, has been accused of involvement in a sex trafficking ring run by the deceased financier Jeffrey Epstein and socialite Ghislaine Maxwell.
The Daily Beastreports on court documents that were unsealed last week in a defamation suit against Maxwell by a woman who claimed she was forced to have sex with Richardson and other prominent figures:
The tax increase that Sierra County voters approved in 2008 to support the construction of Spaceport America has no expiration date and no restrictions on the use of excess revenues that might be collected each year, according to the ordinance passed by county commissioners.
This one deals with financing at Spaceport America. It requires a bit of understanding of the history of how it was funded.
So, here’s the back story: In 2007 and 2008, residents of Dona Ana and Sierra counties approved a quarter cent increase in the sales tax to help pay for the construction of Spaceport America, where billionaire Richard Branson plans to send rich people on suborbital joy rides.
New Mexico State Sen. Lee Cotter (R-Las Cruces) has renewed efforts to bring tax relief to residents of Dona Ana and Sierra counties relating to their support of Spaceport America.
In 2007, residents of the two counties agreed to increase their taxes to help fund the construction of the facility, which is located outside of Truth or Consequences. The taxes remain in place to pay off bonds sold to fund Spaceport America’s construction.
New Mexico State Senator Lee S. Cotter (R-Las Cruces) has introduced legislation to repeal the New Mexico Spaceport Authority’s (NMSA) power to issue bonds and limit its ability to used tax revenues to support Spaceport America.
Senate Bill 75 aims to remove the ability of NMSA to “issue revenue bonds and borrow money”.
New Mexico legislators spent Monday down in Las Cruces reviewing the finances of Space America. Members of the New Mexico Finance Authority Oversight Committee discovered that more had stayed the same than had changed in recent months.
Here’s a summary of the key points:
Virgin Galactic will likely not begin flying paying passengers for at least another 8 months. It’s not really clear how realistic that goal is; much depends on how upcoming test flights using a brand new motor go in Mojave.
Local taxpayers are partially on the hook for helping to keep the $218.5 million, taxpayer-funded spaceport operational until Virgin Galactic begins commercial flights. Currently, the $218.5 million taxpayer-funded spaceport is being used to launch sounding rockets and shoot commercials for Land Rover.
Operations are being partially funded from excess tax revenues levied in Dona Ana and Sierra counties that could be otherwise spent paying off spaceport bonds or making infrastructure improvements such as paving a southern road to the spaceport.
The $14.5 million that authorities have put aside to pave the road isn’t remotely enough to do the do a full paving job.
Construction on the 24-mile road – which will provide more direct access from Las Cruces – is likely to begin next summer after the Bureau of Land Management completes its review of the project.
SpaceX is about five months from being able to conduct flight tests of its reusable Falcon 9 vehicle at the spaceport.
A new, unidentified tenant is expected to begin flights of whatever it flies sometime during fiscal year 2016.
While Richard Branson’s recent appearances on U.S. TV shows have undoubtedly helped him to sell many copies of his new book, The Virgin Way, the British billionaire unintentionally stirred up a hornet’s nest in the process.
On “The Late Show With David Letterman,” Branson revealed that SpaceShipTwo’s first commercial flight — which he will take with his son, Sam — has been delayed from the end of this year until February or March 2015 at the earliest.
The Doña Ana County Board of Commissioners will be considering how it distributes tax revenues from the Spaceport America project to three school districts at its meeting on Tuesday.
The funds are derived from a 1/4 cent tax hike that county residents approved to help fund development of the $225 million spaceport project. The three school districts receive 25 percent of the tax revenue directly.
The New Mexico Spaceport Authority (NMSA) has approved borrowing $6.5 million to build a Spaceport America visitors center in Truth or Consequences. Meanwhile, Dona Ana County officials are preparing to bid out a contract to pave a southern road that leads to the remote spaceport.
However, the projects won’t measure up to the original plans for them due to funding limitations. The budget squeeze is a result of years of delay in the start of commercial operations by Spaceport America’s anchor tenant, Virgin Galactic.
The delay in the start of Virgin Galactic flights has forced the New Mexico Spaceport Authority to partially fund operations of Spaceport America from a gross receipts tax originally approved to pay for the facility’s construction. It’s a practice one state senator now wants to end but which the spaceport’s management says is essentially to keeping the lights on.
Eager to convince skeptical southern New Mexico voters to approve a tax hike to help fund the construction of Spaceport America, then-Gov. Bill Richardson promised that the revenues would bring millions of dollars in direct support to local schools.
Voters in Sierra and Dona Ana counties approved a quarter-cent increase in the local use tax, and Richardson kept his promise. The tax has raised $32 million in revenues so far, with a quarter of it — $8 million — going to local schools to fund additional teachers and new programs.
Now, with Richardson gone due to term limits, that deal is in danger of unraveling as legislators from other areas of the state are eying the revenue.
A brief roundup of spaceport news in Texas, New Mexico and Alaska:
Brownsville, Texas — SpaceX has increased its land holdings in the Boca Chica Beach area from 12 undeveloped lots to 72 lots, the Valley Morning Star reports. The company is considering building a private launch complex on the Texas Gulf Coast from which to launch its commercial missions. SpaceX and local officials is awaiting the completion of an environmental review by the Federal Aviation Administration.
Las Cruces, New Mexico — A deal to provide local schools with funding in return for residents supporting a tax increase to fund Spaceport America could unravel. A state legislator has asked that funds raised for this purpose be considered as part of a larger program that redistributes tax revenues to support schools statewide. Millions of dollars in tax revenues that currently fund Sierra and Doña Ana county public schools are at risk.
Kodiak, Alaska — The flight-challenged Kodiak Launch Complex has only one rocket launch scheduled for 2014, but it is pursuing three additional ones for future years. “Things are coming in,” said Alaska Aerospace Corp. COO Mark Greby. “We’ve got people coming in the door now. We’ll get some of them.” The state is eager to see more launches from the spaceport in order to reduce subsidies. Officials are also looking at using Kodiak to support drone flights and monitor launches from other spaceports, including the Mid-Atlantic Regional Spaceport in Virginia.
Plans to pave a road that would provide more direct access to Spaceport America from Las Cruces have hit a snag over design and budget issues.
Engineers in Doña Ana County did a design for the project, which involves paving 23.7 miles of dirt road between the village of Hatch and the spaceport. However, officials in Sierra County — where 16.7 miles of the paving would be done — don’t like the plan because they believe the road would be too expensive to maintain once paved.
Voters in Sierra County overwhelmingly approved an increase in the sales tax to help fund Spaceport America, New Mexico’s ambitious effort to build a gateway to the stars.
The Las Cruces Sun-Newsreports that 65 percent of voters approved the .25 cent tax increase, a wider margin than some had predicted. The 42 percent turnout was the highest ever for a special election.
“I’m feeling good,” New Mexico Spaceport Authority Executive Director Steve Landeene said. “It’s been an emotional day and obviously the outcome is a very positive emotion.”
The approval means that a taxation district can be formally established with Dona Ana County, whose residents narrowly approved the tax increase last year. Voters in neighboring Otera County will go to the polls in November.
New Mexico hopes the spaceport will be used for a variety of purposes, most prominently to send tourists on suborbital flights. The state is in negotiations with London-based Virgin Galactic to be an anchor tenant.